Microsoft Beefing Up Dynamics CRM in Q4, Adding Partner Perks

Microsoft today announced some new Dynamics CRM Online capabilities to come this fall, as well as benefits that its partner community can expect.

The changes will apply to Microsoft's on-premises Dynamics CRM offering as well. Microsoft boasts that it uses the same code base for both applications, although its policy is to implement changes in the online version first. The online service typically gets updated about four weeks before the on-premises server-installed version. Using the same code base allows Microsoft's partner community to "build once and address 100 percent of the market," according to Brad Wilson, general manager of Microsoft Dynamics CRM, a phone interview.

The Dynamics CRM partner news that Microsoft is announcing at its Worldwide Partner Conference in Los Angeles today is an extension of financial incentives. Microsoft is extending the 40 percent margin for those partners for another year -- through June 29, 2012.

"This is by far the richest margin program for partners in the cloud space right now," Wilson said. He clarified that Microsoft pays its partners a 40 percent margin on the first year's contract for customers that have moved to CRM Online. "It puts more money in the hands of our partners to help them build new assets, reskill their people and make the transition to selling cloud-based solutions," he said. Microsoft also provides internal-use licenses to all of its partners to use Dynamics CRM Online to run their own businesses, which is a benefit that Microsoft announced last year.

At the Worldwide Partner Conference on Monday, Jon Roskill, Microsoft's corporate vice president for the Worldwide Partner Group, said that 58 percent of partners attending the event have been working with Microsoft cloud solutions. Microsoft currently has more than 30,000 Dynamics CRM customers and more than two million users.

Integration Improvements
Microsoft will add three integration improvements to Dynamics CRM Online in the fourth quarter of this calendar year. The first improvement with be an integration with Office 365, Microsoft's cloud-based suite of application that includes Exchange Online, SharePoint Online and Lync Online. Microsoft rolled out Office 365 to 40 markets in June. Wilson said that Dynamics CRM will have the same "building and provisioning and administration interfaces as we do for Office 365."

"CRM and Office 365 work great together, but today there are separate experiences for provisioning, for signing up, for getting your bill and for going in and administrating your user licenses," Wilson said. "Starting in Q4, those will be offered as a combined offering from Office 365 and CRM Online. The end user side is great today; the admin side will be unified starting in Q4 of this calendar year."

Although Dynamics CRM Online currently is a separate product from the Office 365 suite, Microsoft is planning an eventual inclusion in that suite.

"We announced in October of last year that Office and CRM Online would be joining the Office 365 family," Wilson said. "What it means for us is that Office, Exchange Online, SharePoint Online and Lync Online all work with CRM on premises and CRM Online, and…it's that integrated experience we will be offering starting in Q4."

The second integration improvement in Dynamics CRM Online coming this fall will be an expansion of Microsoft's regional datacenter support capabilities. Microsoft did not indicate which regions will get the additional support, but Wilson suggested that the European Union is already covered.

"We are announcing in Q4 that we are expanding the number of datacenters that we have in each region, which allows us to do disaster recovery and failover within regions," Wilson said. "Today we offer EU compliance services in the EU. In the event of an all-out datacenter failure, we can fail you over to a datacenter within the EU with no concerns about any lack of compliance with existing regulations."

The third integration improvement in Dynamics CRM will be improved identity federation for both on-premises and the cloud. Wilson suggested that IT pros will be able to manage identities housed on premises and in the cloud with a single click using Active Directory. For instance, if an employee leaves a company, IT pros will be able to click one button and both identities will be deleted.

Microsoft has four premises-based enterprise resource planning (ERP) solutions within the Dynamics product line and it has already enabled interoperability with Dynamics CRM. The company currently offers connectors for Microsoft Dynamics AX, Dynamics GP and Dynamics NAV products that work with both the on-premises and online versions of Dynamics CRM.

"The majority of our customers we actually connect up to, for ERP, use third-party products from a wide range of vendors," Wilson said. "So [we have] support connections with our own ERP products, plus we do a ton of integration with third-party products like SAP and Oracle."

At the Worldwide Partner Conference on Monday, Microsoft CEO Steve Ballmer announced that Dynamics NAV will go into the cloud early next year, with the rest of Microsoft's ERP solutions to follow.

Feature Enhancements
Microsoft also announced a four feature enhancements to come in the fall for Dynamics CRM Online. There will be some improvements in business intelligence capabilities, Wilson promised. Microsoft will improve "dialogs," which are scripted interactions between sales, service people and customers. Data cleansing in Dynamics CRM Online will be improved with an eye toward de-duplicating data. Finally, Microsoft plans to add new social engagement capabilities that will be integrated into Outlook, Web browsers and Windows Phone clients. An activities feed will be included for sales and marketing users that will work "kind of like Facebook," Wilson explained.

In the first half of the next calendar year, Dynamics CRM will be opened up to work with Safari, Firefox and Chrome browsers, as well as Internet Explorer, Wilson said. The added browser support will broaden the reach of Dynamics CRM, he added.

Small businesses are likely to see the benefits of the cloud because they can access technology with reduced upfront costs, while midsize or large companies may prefer the on-premises products, Wilson said. "Larger organizations have been slower to do broad cloud rollouts," he said, adding that the majority of new users have come from Microsoft's on-premises sales. In any case, Microsoft and its partners can accommodate both approaches.

"The cloud is 25 percent of the $10 billion to $12 billion CRM category," Wilson said. "The majority is still on-premise, but the cloud is growing quickly."

There are three ways to get Dynamics CRM: either through Microsoft's multitenant service delivered via its global datacenters, through partner-hosted services or via an on-premises server installation. Microsoft's partners include ISVs, VARs, system integrators and hosting partners (such as HP and Avanade). It's possible to get dedicated service, which is handled by Microsoft's hosting partners, Wilson said. A local partner also might be the best choice when there are country-specific data sovereignty issues for organizations using the cloud, he added.

While Dynamics CRM was designed to support the needs of sales personnel, it's also being adapted for other uses.

"Partners in many cases are building extended CRM solutions for things like vendor management, assets management, grants management, etc. that use the same kind of technology but aren't really going to a typical audience of sales people," Wilson said.